Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

AWK Unit Invests in Water Systems

American Water Works Company’s (AWK - Free Report) unit Pennsylvania American Water decided to increase its water storage capacity my making fresh investments of $16.5 million. Of this $11.5 million will be used to construct 9 new water storage tanks and $5 million will be kept aside for repair and maintenance of 14 existing water storage tanks.

The decision to invest in new storage tanks was driven by the need for sufficient and reliable water supply in its service territories. The new storage tanks will increase Pennsylvania American Water’s water storage capacity by around 4.4 million gallons and are expected to become operational by 2013 end. The new storage capacity will help the company to meet the growing demand for water from customers and for fire protection.

The repair and maintenance of the existing 14 storage units will not only ensure reliable supply of water to its customers but also save costs substantially in contrast to replacing the structures. These savings will free up capital for strategic acquisitions.

Recently, Pennsylvania American Water expanded its presence in northeast Pennsylvania by acquiring two water systems for a total price of $1.65 million. The strategy to grow through organic and inorganic initiatives will help the company to meet increasing customer demand.

Illinois American Water has also invested about $330 million in water and wastewater system improvements across the state in the 2009 through 2013 period.

As per American Water Works Association, the maintenance and replacement of outdated water systems in the U.S. will cost at least $1 trillion over the next 25 years. The 2013 capital budget of the water utility Connecticut Water Service Inc. (CTWS - Free Report) includes $31.3 million for infrastructure investment. Although it is an uphill task, systematic investments from water utilities would make it more feasible.

American Water Works Company currently has a Zacks Rank #2 (Buy). We also like Aqua America Inc. (WTR - Free Report) having a Zacks Rank #1 (Strong Buy). American States Water Company (AWR - Free Report) also looks favorable with a Zacks Rank #2 (Buy).

Voorhees, NJ based American Water Works Company was founded in 1886. This water and wastewater utility caters to approximately 14 million residents across the country and parts of Canada. With approximately 6,700 employees, the company’s market capitalization is $7.17 billion.

Resources

Client Support

Follow Us

Zacks Research is Reported On:

Yahoo

MSN

Marketwatch

Nasdaq

Forbes

Investors.com

Morningstar

Zacks Investment Research is an A+ Rated BBB Accredited Business.

Copyright 2016 Zacks Investment Research

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1988-2015 and were examined and attested by Baker Tilly Virchow Krause, LLP, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.